• The "Alexa for cars," providing the voice AI technology for auto manufacturers.
• Like Mobileye for in-car voice AI, supplying automakers with their intelligent assistants.

• Cerence Drive: Provides AI-powered voice assistant and conversational AI capabilities specifically designed for automotive environments, enabling intuitive human-machine interaction within vehicles.
• Cerence Mix: A cloud-based platform that allows automotive manufacturers to develop, customize, and deploy unique, branded in-car voice and conversational AI experiences.
• Cerence Connect: Offers cloud-based services that integrate real-time digital content and information, such as navigation, weather, and streaming media, into the vehicle's user experience.

Cerence (CRNC) sells primarily to other companies, specifically global automotive manufacturers (Original Equipment Manufacturers or OEMs). The company provides AI-powered conversational and interactive technologies for in-car experiences. While Cerence's 10-K filings often state that no single customer accounts for 10% or more of its total revenue, its major customers are leading automotive brands that integrate Cerence's technology into their vehicles, making them significant partners in terms of market reach and strategic importance.

Major customers include (but are not limited to):

• Mercedes-Benz Group AG (Frankfurt: MBG, OTC: MBGAF)
• BMW Group (OTC: BMWYY, Frankfurt: BMW.DE)
• Ford Motor Company (NYSE: F)
• General Motors Company (NYSE: GM)
• Volkswagen AG (OTC: VWAGY, Frankfurt: VOW3.DE)
• Stellantis N.V. (NYSE: STLA)
• Toyota Motor Corporation (NYSE: TM)
• Hyundai Motor Company (OTC: HYMTF, KRX: 005380)

• Amazon.com, Inc. (AMZN)

Brian Krzanich, President and Chief Executive Officer

Brian Krzanich joined Cerence AI in October 2024. He previously served as CEO of CDK Global Inc. from 2018 to 2022, where he led the company through a successful sale to Brookfield Business Partners for $8.3 billion. Prior to that, he spent 36 years at Intel, including his tenure as CEO from 2013 to 2018, during which he guided Intel into new areas such as cloud computing, artificial intelligence, and autonomous driving, increasing revenue from $52 billion to over $70 billion.

Antonio Rodriquez, Executive Vice President, Chief Financial Officer

Antonio Rodriquez is responsible for the management and oversight of Cerence AI's finance organization. He previously served as a partner of CSuite Financial Partners, where he held the role of Chief Financial Officer of The Bouqs Company from 2019 to 2023. He was also the interim Chief Financial Officer of Cerence AI from June 2024, before becoming an employee on November 29, 2024. With over 25 years of experience, he has served as a financial leader for both public and private global companies across industries including eCommerce, SaaS, advertising media, and consumer marketing. Before joining CSuite Financial Partners, he was the Chief Financial Officer of TouchCommerce Inc. from 2010 to 2018, and he began his career at KPMG LLP.

Jennifer Salinas, Executive Vice President, Chief Administrative Officer & General Counsel

As Executive Vice President & Chief Administrative Officer, Jennifer Salinas oversees Cerence AI's day-to-day administrative activities and corporate operations, including strategic planning, defining and tracking company objectives, advancing policy and process improvement, and leading the company's transformation efforts. She also leads Cerence AI's legal team as the General Counsel and the Global Technology Services organization. Her background includes over 25 years of experience, including ten years as a Partner at several prominent law firms. Ms. Salinas is the former President of the Hispanic National Bar Association.

Nils Schanz, Executive Vice President, Product & Technology

As Executive Vice President, Product & Technology, Nils Schanz leads Cerence AI's global technology, engineering, and product development organization. He is responsible for driving alignment across innovation, product, and customer delivery to position Cerence AI to meet current and future customer needs.

Christian Mentz, Executive Vice President, Chief Revenue Officer

Christian Mentz is a seasoned automotive technology executive who joined Cerence AI from Amazon, where he most recently led Global Business Development and Marketing for Amazon Smart Vehicles. In that role, he was responsible for commercial operations and go-to-market strategies for a wide range of automotive digital cabin products and services. Previously, Mr. Mentz held progressing automotive sales leadership roles at Nuance Communications, including Vice President - Automotive Sales & Sales Engineering.

The key risks to Cerence's business include:

1. Vulnerable Financial Position and Debt: Cerence faces a significant risk due to its vulnerable financial position, particularly a $90 million convertible debt maturing in June 2025. While the company anticipates generating sufficient free cash flow to cover this debt, its overall debt load, characterized by a weak interest cover and a high net debt to EBITDA ratio, remains a concern. This debt could limit financial flexibility and increase vulnerability to economic downturns.

2. Dependence on New Vehicle Sales and Macroeconomic Conditions: Cerence's revenue generation is heavily reliant on new vehicle sales, making it susceptible to fluctuations within the broader macroeconomic environment and the automotive industry. Adverse economic conditions, such as high interest rates and credit availability, can lead to production delays and slowdowns in the automotive sector, directly impacting Cerence's business.

3. Highly Competitive and Rapidly Changing Market, and Technology/Innovation Risks: Cerence operates in a highly competitive and rapidly evolving market. The company faces ongoing challenges in quickly adapting to technological advancements, developing its intellectual property into commercially viable products, and addressing potential software defects. "Tech & Innovation" is consistently identified as a significant risk category for the company.

The following clear emerging threats have been identified for Cerence (CRNC):

• Deepening Integration of Major Tech Platforms' Native Voice AI: The increasing adoption of Google's Android Automotive OS, which often features deeply integrated Google Assistant as the primary in-car voice interface, poses a direct threat. Similarly, Apple's expanded CarPlay initiative (often referred to as CarPlay 2.0), aiming for deeper vehicle integration including instrument clusters and vehicle controls, could elevate Siri's role as the default voice assistant for a broader range of in-car functions, potentially diminishing the need for third-party voice AI solutions.
• Automakers' In-housing of Software Development: A growing number of major automotive manufacturers are investing significantly in developing their own proprietary in-car operating systems and software stacks, including voice AI and conversational interfaces. This strategic move to insource critical software components, exemplified by initiatives from companies like Mercedes-Benz (MB.OS) and Volkswagen (Cariad), aims to reduce reliance on external suppliers and directly competes with Cerence's core offerings.

Cerence (CRNC) primarily focuses on AI-powered voice and conversational technologies for the automotive industry, including solutions for intelligent cockpits and virtual assistants.

The addressable markets for Cerence's main products and services are sized as follows:

• Global Conversational AI Market: This market was valued at approximately USD 15.5 billion in 2024 and is projected to reach around USD 132.86 billion by 2034, growing at a Compound Annual Growth Rate (CAGR) of 23.97% between 2025 and 2034.
• U.S. Conversational AI Market: In the U.S., this market was estimated at USD 3.26 billion in 2024 and is expected to be worth around USD 28.57 billion by 2034, with a CAGR of 24.24% between 2025 and 2034.
• Global Virtual Assistants Market: The broader global virtual assistants market is projected to be worth USD 23.57 billion by 2033, with a CAGR of 22.3%.
• Global Automotive Intelligent Cockpit Platform Market: This market was valued at USD 8.1 billion in 2023 and is projected to grow at a CAGR of 12% between 2024 and 2032, reaching USD 21.5 billion by 2032.
• U.S. Automotive Intelligent Cockpit Platform Market: This market in the U.S. is expected to exceed USD 3 billion by 2032.
• Global Automotive Digital Cockpit Market: This market was estimated at USD 14.7 billion in 2018 and is projected to reach USD 35.9 billion by 2025, growing at a CAGR of 13.59%.

Cerence holds a strong position in the automotive voice AI market, with over 50% global market penetration, and over 70% when excluding China. In the smart speech solution market in China, Cerence held a 15.6% market share in Q1 2025.

Cerence Inc. (CRNC) is expected to drive future revenue growth over the next 2-3 years through several key initiatives and market trends:

1. Expansion and Adoption of the xUI AI Platform: Cerence is seeing accelerating adoption of its xUI AI platform, which is a hybrid agentic AI assistant. The company has achieved major milestones with this platform, including market launches and signing several agreements with top automakers, indicating robust customer interest. This platform aims to deliver next-generation voice- and AI-powered user experiences, transforming how people interact with their vehicles and digital ecosystems.
2. Growth in Connected Services and Recurring Revenue Models: The company is experiencing steady growth in its connected install base, leading to an increase in connected services revenue. There is a noted shift towards recurring and usage-based models, which is expected to contribute to revenue growth. This indicates a strategic move towards more stable and predictable revenue streams.
3. Strategic Partnerships with Vehicle OEMs: Cerence emphasizes its strong market position and partnerships with vehicle OEMs to drive in-car experiences forward. These ongoing collaborations with leading automakers are crucial for embedding Cerence's technology into new vehicles.
4. Expansion into New Automotive and Non-Automotive Markets: Cerence is actively expanding into new automotive and non-automotive sectors. Opportunities exist in new verticals such as retail, healthcare, and banking through the application of conversational AI. This diversification beyond its core automotive market presents new avenues for revenue generation.
5. Increased Fixed License Contracts: The company's revenue guidance for fiscal year 2025 anticipates a significant contribution from new fixed licenses, planning for $20 million in new fixed licenses. This type of licensing involves revenue recognition upon contract signing, and strong interest in these contracts can provide substantial revenue boosts.

Share Repurchases

• Cerence repurchased approximately $27 million of its 3.00% Convertible Senior Notes due 2025 in December 2024 at 98.5% of their principal amount.
• The company intends to pay off the remaining $60.5 million of these notes upon their maturity in June 2025 using existing cash.
• These repurchases aim to reduce interest expense, eliminate potential dilution from refinancing, and lower leverage.

Share Issuance

• Common shares outstanding increased from 38,538,050 as of November 9, 2021, to 42,827,789 as of November 13, 2024.
• Stock-based compensation expense, representing equity issued to employees, was approximately $19.291 million for the nine months ended June 30, 2024, and $20.047 million for the nine months ended June 30, 2025.
• The Cerence 2019 Equity Incentive Plan facilitates the grant of incentive stock options, stock awards, stock units, stock appreciation rights, and other stock-based awards.

Capital Expenditures

• Capital expenditures totaled approximately $3.550 million for the nine months ended June 30, 2024, and $11.353 million for the nine months ended June 30, 2025.
• The primary uses of cash for Cerence include costs of revenues, funding of research and development activities, and capital expenditures.
• The company's senior credit facilities include a covenant limiting aggregate capital expenditures to not more than $10 million.